You are looking at Apple’s next iPhone. It was found lost in a bar in Redwood City, camouflaged to look like an iPhone 3GS. We got it. We disassembled it. It’s the real thing, and here are all the details.

“We got it,” they said. How?

There was much speculation about that, but obviously — if the phone was a real prototype — it must have been lost by an Apple employee. That’s why I tweeted, “Some employee is in very deep shit for letting this happen: http://bit.ly/bVN5Ma” But others wondered. Was it planted by Apple? That’s what, for example, Howard Stern guessed on his show yesterday morning. He thought it was a brilliant marketing move by Apple.

But Gizmodo set their record straight, through a much-updated piece titled How Apple lost the next iPhone. After telling the story, at length, of how Gray Powell, an Apple employee, had left it at a restaurant (“The Gourmet Haus Staudt. A nice place to enjoy good German lagers”), Gizmodo unpacks the means by which the phone came into their possession:

There it was, a shiny thing, completely different from everything that came before.

He reached for a phone and called a lot of Apple numbers and tried to find someone who was at least willing to transfer his call to the right person, but no luck. No one took him seriously and all he got for his troubles was a ticket number.

He thought that eventually the ticket would move up high enough and that he would receive a call back, but his phone never rang. What should he be expected to do then? Walk into an Apple store and give the shiny, new device to a 20-year-old who might just end up selling it on eBay?The Aftermath
Weeks later, Gizmodo got it for $5,000 in cash. At the time, we didn’t know if it was the real thing or not. It didn’t even get past the Apple logo screen. Once we saw it inside and out, however, there was no doubt about it. It was the real thing, so we started to work on documenting it before returning it to Apple. We had the phone, but we didn’t know the owner. Later, we learnt about this story, but we didn’t know for sure it was Powell’s phone until today, when we contacted him via his phone.

The apparent purpose of the story is to save Gary Powell’s ass, as well as to cover some of Gizmodo’s as well. It concludes,

He sounded tired and broken. But at least he’s alive, and apparently may still be working at Apple—as he should be. After all, it’s just a stupid iPhone and mistakes can happen to everyone—Gray Powell, Phil Schiller, you, me, and Steve Jobs.

The only real mistake would be to fire Gray in the name of Apple’s legendary impenetrable security, breached by the power of German beer and one single human error.

One big question is how much Gizmodo paid for the phone, and whether keeping it was legal. Nick Denton, chief executive of Gawker Media, which owns Gizmodo, told The Times the site paid $5,000 for the phone. But still bloggers wondered if it had really paid $10,000.

On Monday, Charles Arthur, Technology blogger for The Guardian, said paying for the phone could mean that Gizmodo was knowingly receiving stolen goods; on Tuesday, citing the Economic Espionage Act of 1996, Mr. Arthur expanded on his theory.

This helped the debate move on to more serious matters: whether the phone was “lost,” or “stolen.” John Gruber, blogger for Daring Fireball, pointed outthat in the eyes of California law, there isn’t a difference. The law states:

One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.

The next big question — whether Gizmodo would turn over the phone to Apple — was answered after a long day of speculation on Monday over itsauthenticity. Gizmodo has reported that it received a letter from Apple’s legal counsel…

Gizmodo complied and returned the phone. Yesterday I tweeted, “Re: bit.ly/d0P4Vo If you found a next-gen iPhone, would you return it — or use it to pull the owner’s pants down?” Thus far, two responses:

BlackSwanMA@dsearls I would return it and see if they would give me a job, based on background in IT and personal integrity

Of course, what Gizmodo did was an example of investigative journalism at work. Mainstream journals and broadcasters sometimes pay for stories, leads, video and audio recordings, photographs. That’s not unusual. But, as Charles Arthur writes, “As a reporter – and make no doubt, Gizmodo is reporting here, actually doing journalism red in tooth and claw – you inevitably end up walking close to the edge of what’s legal every now and then. Whether it’s being in receipt of confidential information, publishing something that’s potentially defamatory, or standing closer to the front line of a protest than the police would like, you occasionally have to put yourself in some legally-risky positions.”

Many thousands of years ago on the time scale of both the Internet and journalistic practices, specifically in 1971, I wrote a story for a New Jersey newspaper about rural poverty, illustrated by a photo I took of somebody’s snow-covered yard filled with discarded appliances and half-disassembled old cars sitting on cinder blocks. I thought at the time that the photo was sufficiently generic to protect the anonymity of the home’s occupier. I was wrong. The owner called me up and let me have it. I was still a kid myself — just 22 years old — and it was a lesson that stuck with me.

A couple decades later that lesson was enlarged by “Notes Toward a Journalism of Consciousness,” by D. Patrick Miller, in The Sun, a magazine for which I had once been a regular contributor. (No links to the story, but its table of contents is here.) In it Miller recalled his work as an investigative reporter in the Bay Area, and how sometimes he had to cross a moral line. In his case it was gaining the confidence of sources he would later, in some ways, betray — for the Greater Good of the story’s own moral purposes.

Gizmodo poses the moral goodness of its own story against the backdrop of Apple’s fanatical secrecy:

And hidden in every corner, the Apple secret police, a team of people with a single mission: To make sure nobody speaks. And if there’s a leak, hunt down the traitor, and escort him out of the building. Using lockdowns and other fear tactics, these men in black are the last line of defense against any sneaky eyes. The Gran Jefe Steve trusts them to avoid Apple’s worst nightmare: The leak of a strategic product that could cost them millions of dollars in free marketing promotion. One that would make them losecontrol of the product news cycle.

But the fact is that there’s no perfect security. Not when humans are involved. Humans that can lose things. You know, like the next generation iPhone.

Still, I think distinctions matter. There is a difference in kind between writing to produce understanding and writing to produce money, even when they overlap. There are matters of purpose to consider, and how one drives (or even corrupts) the other.

Two additional points.

One is about chilling out. Blogging doesn’t need to be a race. Really.

The other is about scoops. They’re overrated. Winning in too many cases is a badge of self-satisfaction one pins on oneself. I submit that’s true even if Memeorandum or Digg pins it on you first. In the larger scheme of things, even if the larger scheme is making money, it doesn’t matter as much as it might seem at the time.

What really matters is … Well, you decide.

Gizmodo was acting in character here. That character is traditional journalism itself, which is no stranger to moral compromises.

I’m not saying that one must not sometimes make those compromises. We all often do, regardless of our professions. What makes journalism a special case is its own moral calling.

How high a calling is it to expose the innards of an iPhone prototype?

Was malice absent in Gizmodo’s case? And, even if it was, is the story worth what it cost to everybody else involved — including whatever dollar amount Gizmodo paid to its source?

I submit that it wasn’t. But then, I’m not in Gizmodo’s business. I also don’t think that business is journalism of the sort we continue to idealize, even though journalism never has been as ideal as we veterans of the trade like to think it is.

28 comments

Yours is a considered response with a fair degree of perspective. Indeed, it has all the qualities that the Gizmodo “iphone4” blog posts lack.

I’m afraid I read Gizmodo’s original piece with mild irritation. Gizmodo has a tabloid sensibility without the wit and intelligence of the British journalists who specialise in this type of unpleasant drivel.

I agree wholeheartedly that the notion of the scoop is overrated. It seems to me that the internet has created an odd environment where news outlets are so desperate to be first with a headline that they actually forget the content that is required to follow. Nowhere is this more acute than the Silicon Valley tech news environment.

In this instance the lost/found/stolen iphone proved to be nothing more than a headline. The content that followed told us nothing about the device in form or function. The real story then became “the story behind the story” and I for one feel sorry for the Apple employee who is paying a very high price for a moment of carelessness.

There is a good discussion about this whole fiasco on this week’s Macbreak Weekly podcast where Merlin Mann echoes much of what you have written.

If I was Gizmodo I think I’d currently be sitting uncomfortably waiting for a legal letter form Cupertino. Steve will not be a happy man.

“How high a calling is it to expose the innards of an iPhone prototype?” – I suspect high enough for gizmodo’s bloggers to actually do it.

Whatever the factual chain of events, the intentions, hintergedanken, and so on – as a result Apple leads the buzz. Only shortly after the rocketlike launch of the iPad, and the more or less casual upgrade of the MacBooks, there is not saturation or ennui, there is anticipation again. There is rumours, and of the best kind: substantiated.

And so, be it a mistake of Gray Powell’s or a scam, the result is a remarkable publicity stunt that keeps the glutton hungry, so to speak. And on top of this the cost is crowdsourced via Gawker to all customers of the companies that advertise on Gizmodo, which Apple doesn’t. In way this is funny, it is also a little disgusting.

Exactly what part of journalistic ethics required the outing of the kid who lost it on that scale? No, i don’t buy, for a second, the b.s. line that they’re protecting him by doing that. Apple’s disregard for the opinions of prat collectives like gitmodo makes that ‘logic’ as asinine as it sounds. if they are going to fire the kid because they have to, then they will.

Even if you buy into it, it didn’t require publishing his picture. it didn’t require transcripts of phone conversations or pictures of twitter pages. it required none of that.

this was bullying. pure and simple, and lest we award gitmodo with some form of ethical behavior, keep in mind this was the same outfit who got banned from CES because they thought that running around with a universal remote and killing presentations they disliked was funny. note, they never actually apologized for it.

I appear to have missed the part of journalistic ethics that stated “when you’re part of the press, you can mess with people all you want, and the first amendment keeps you from ever facing the results of your actions.

“Journalist” and “Bully” are different words with different meanings for a reason.

Totally loved this well thought-out piece. Had there been no byline on it, I would have known it was your voice.

Like my employer (TechWeb), Gizmodo is in the media business. There’s a reason it’s called the media business. It’s a business and it’s tougher to survive in that business today than it has ever been. Every media property has its target audience and for the most part, it’s a zero sum game. For example, we know there are approximately 10 million IT pros and developers in the world and we also know that humans spend a relatively fixed amount of time with content across any given week or month. If you do the math, that equates to some number of total eardrum and eyeball seconds across some target audience. There isn’t much I as a media pro can do to change the fixed size of that pie. I can’t change the number of IT pros out there. I can’t change the amount of personal time they’re willing to give up to interact with media (consume, produce, etc.). The only thing I can hope to change is the size of my slice of the pie.

And this has been true of the media business since it started. Media is a three-legged stool. Content begets Audience. Audience begets Ads (revenue). Pull one leg out, the stool falls over.

So, for those companies still left in the media business, you are always looking for an advantage. Call it a scoop or whatever. Reporters have a long and storied history of coming into possession of things (very often documents) that don’t belong to them and whose “delivery” involved surreptitious means. For 25 years, this has been SOP in the tech business.

Media business success invariably follows the reporter or outlet that develops a reputation for highly relevant revelations. It builds brand, audience, and ultimately a business.

Are there other means for building a successful media property? Sure. There are lots of arrows in our quivers. But this one will always be one of them.

I feel badly for Gary Powell and Apple. But as a media pro, I’m jealous of Gizmodo. They got the scoop. It was good for their slice of the pie. And it built their brand. Gizmodo will undoubtedly get a call about the next secret gadget that’s found on a bar stool. I’m quite conflicted about the morality of the issue vs. the responsibility I have to my employer. Especially after reading that piece. But there isn’t a successful media pro in the world (including me) that doesn’t wish it was them that got their hands on the iPhone 4G (even at a cash cost). If they tell you otherwise, they’re lying.

I agree that Steve is not pleased with this, but doubt that a letter from Steve to Gizmodo is on its way, or required. Nor do I think the employee who lost the phone will be fired. There’s no upside to either, and both the employee and Gizmodo have been punished enough.

I also think it’s likely that the next iPhone will not be the one Gizmodo paid for and showed off — for a number of now obvious reasons. Which makes the “scoop” even more of a hollow victory for Gizmodo.

Right to privacy and the methods Apple uses are certainly their choice, but their attempt to control media and news cycles is what makes them a target. There is a difference between reclusive and privacy, neither of which is in play here. Apple wants all the coverage it garner for free, just on their terms.

Gizmodo didn’t break and enter, nor take by force, rob or steal the device. They merely paid a source for access to it. Has happened before, and will happen again. As you even noted often times the source is dragged under the bus. We agree, it happens.

The fact the media preys on celebs and the culture has turned into vulture, just means more filtering is required by everyone. Anyone remember Steve Bartman?

Last night my wife asked me if I would return it, or look inside… my first reaction was that I’d look inside…. mostly because that’s what I had read other people did….

Once I settled down and actually THOUGHT about it for a minute, I know that I would have hunted down the person who lost it, or turned it in to the lost and found for the Bar.

I once found an engagement ring while commuting home from work… Turns out the woman had taken it off while in her car for just a moment… and then it had fallen out. I was very happy to learn this story a few days later from the person who handled lost and found at my train station.

We DO get too caught up in the need to be first, to get the little bit of attention… we tune our loops for the wrong things. It’s time to correct the steering a bit, and keep it on the straight and narrow.

Once again, you write about something that I thought about…. are you psychic?

What is investigative about getting hands on a gadget by accident and publicly disassembling it when it will be revealed in some months anyway? There are so many real issues happening on this planet that need to be uncovered, where people get unnecessarily harmed or injustice is done. To disclosure things like that is investigative, but that’s another league Gizmodo is definitely not playing in. People are simply so starstruck – even if the star is just a “magical” telephone, people want to get recognized in its halo. There are lessons to learn.

Thanks, Doc. I think you’ve helped me get my hands around what has bothered me so much about this story. By the way, you’ve spelled his name “Gary” and “Gray” in this post — I think it’s “Gray” (but I’m sure he won’t mind if people think it’s Gary).

Last summer I was at an ATM machine with an unfinished transaction and a card sticking out. So I followed my instincts and tracked the girls who came be before me and returned the items. That’s just fair.

Gizmodo and the “finder” should be held accountable because I don’t want to live in a society that tolerates this kind of shady behavior.

Doc, this is kind of where the whole focus on commerce as the center of existence leads us into absurdity.

First, it’s a consumer electronics product. It’s not “news.” Apple uses secrecy in part to preserve the value of existing products in the market (marketing), in part to heighten anticipation (marketing), and in part to preserve their competitive advantage (commerce). None of this has any real relevance as “news,” unless you think stories about consumer electronics devices are somehow “important.” I don’t doubt for a moment that many people do, sincerely, believe these are “important,” but they’re wrong and it’s a symptom of the problem our commercial culture has created with discerning genuine issues and priorities.

This is “journalism” in the same way that what the paparazzi did to Lady Diana was “journalism.” It’s voyeurism offered as a commercial service, marketed as “journalism.”

I read your piece twice, and perhaps I’m becoming progressively more cognitively impaired in my advancing years, but it seems to me like you’re firmly straddling both sides of the fence here.

All that said, I eagerly await the arrival of my 64GB iPad WiFi+3G, and you can be certain I will be among the first to upgrade my iPhone 3G to whatever the new device will be. (Which I strongly suspect will be exactly what Gizmodo published.) So, full disclosure, I’m an Apple customer and an enthusiastic user of their products.

But I’m not so foolish as to believe that any of this ought to be thought of as “journalism.” And I find it discouraging that people who probably should know better seem to.

The pull quote: This is “journalism” in the same way that what the paparazzi did to Lady Diana was “journalism.” It’s voyeurism offered as a commercial service, marketed as “journalism.”

Well put.

I think I should have made clear that, even though Gizmodo is a geek tabloid, hounding Apple like the paparazzi hounded Diana (with a similar disregard for likely collateral damage), the moral compromises they showed in this case are not much different than some committed within journalism of the respectable sort.

Disclosure: I’m not an Apple customer (save for an iPod I bought way-back-when that had planned obsolescence written all over it). In short, I am not a fan. Maybe that’s what makes it easy for me to reduce the meta-journalism to “dog bites man,” and to discount it.

The journalism: Man loses prototype. Man2 finds prototype and turns it over to news organization (while pocketing a finder’s fee, I gather). News organization makes a tech assessment and includes breathless self-congratulatory BS in the write up while doing a full Lois Lane happy dance about the “scoop.” Upon owner’s request they return the device.

The meta-journalism: Stories about the ethics about writing about the device. Stories about the values and the conduct of the people who wrote about the device. Spin-off stories about “you’re in big trouble now, Gizmodo!”

If this had been a Cisco prototype wireless, self-powered, pocket-sized, personal edge-router that some buffoon left in a bar, the story would have been the same. Fewer people would have read it and the meta-journalism cloud of moral judgment would have been at most a thin haze of tch-tch-tch tongue-clucking. Instead, the story was about a high-end commodity product, marketed and sold by one of the most successful hucksters since P.T. Barnum and naturally there was a dense cloud of meta-meta obscuring what the story was really about.

I’m sure Hanan Cohen has his tongue in cheek when he compares the controversy surrounding Uri Blau’s 2008 story, “License to Kill,” with the issues raised by Gizmodo’s willingness to reveal that indeed there is a new Apple iPhone prototype and we all will have to continue to suffer the marketing noise surrounding its release much as American consumers in the 1950s found themselves caught up in the excitement (or yawning) about the sweeping fins and triple tail lights on the most recent model year DeSoto.

Anyway, Declan McCullagh said as much (and as little) as need be said about all this. He avers that there is even now an official investigation underway, but his source, of course, is confidential…

Hi Doc, a brief reply concerning that old chestnut “moral equivalency,” but first I must salute Frank’s exquisitely tuned sense of cynicism by which all of this angst may be summarily (if meta-meta-ly) dismissed as the convoluted misapprehensions of the deluded and defrauded. Not sure it advances anything other than raising the bar for cynicism, but well played nonetheless.

With regard to the “moral compromises” committed by journalism of the respectable sort, presumably what makes it “respectable” is that the moral calculus yields a result that suggests a greater moral purpose is advanced in the action than the one that was compromised.

In the Gizmodo/iPhone case, nothing was advanced, save perhaps some commercial interests; although it would be going too far to suggest that we were diminished significantly more than we already were, to whatever extent that we are responsible for the circumstances that permit this sort of foolishness to exist and even thrive.

Were my sense of cynicism as acute as Frank’s I might have spared myself the intellectual effort of a response of any sort, as this is all likely beneath any intelligent person’s notice, let alone comment.

Don’t be so quick to dismiss a really good conspiracy theory, simply because the facts don’t merit it. I’m wondering if we can apply the eyewitness account theory here, simply because usually no two will be exactly the same. However, in this case, all the original ‘sources’ say the same thing. Strange.

Thanks for the spelling correction. The lesson was that investigative journalism is not without its own victims, or potential ones. The good I thought I was doing also involved a form of harm. I thought my duties as a journalist transcended the interests of my sources, at least in some ways, and I found that wasn’t right.

“I’m quite conflicted about the morality of the issue vs. the responsibility I have to my employer. Especially after reading that piece. But there isn’t a successful media pro in the world (including me) that doesn’t wish it was them that got their hands on the iPhone 4G (even at a cash cost). If they tell you otherwise, they’re lying.”

I’m certain I’m belaboring this past the point of the internet’s attention span, but I’m puzzled.

Dave Berlind offers that he’s “conflicted about the morality of the issue vs. the responsibility I have to my employer,” yet discloses he wishes he had had the opportunity to advance the commercial interests of his employer ahead of his (presumed) wish to be a moral person. And then goes on to assert that any “media pro” who says he wouldn’t do likewise is lying.

This elicits no comment from you. You even call him “good people.” Maybe he is, I have no idea. We all have feet of clay.

But I confess I’m totally at a loss to understand what your view of “the good” is.

Mr. Berlind’s comment seems like the most damning evidence of the corrosive power of the competitive marketplace, and it slides right by you without so much as a raised metaphorical eyebrow.

“Markets are conversations?” What the hell are we talking about?

Mr. Berlind has effectively stated that his commitment to any sort of moral conduct is contingent on what the market will bear. The old joke about “We’ve already established what you are. Now we’re just haggling over the price,” comes to mind.

We can set up the usual thought experiments about being stranded in the Andes with nothing to eat except each other and supposedly “prove” that all moral conduct is contingent. I’m just disappointed with how cheap it is.

What is that thing about “authority” and how we’re all “authoring” each other you always write about? Would the exchange between you and Mr. Berlind qualify as a good example of that?

I thought I remembered you wrote a post once about losing something on a bus in Boston, and needing the bus number. I tried to Google for it, but couldn’t find it. Thought maybe it might have been relevant in some way, but maybe not.

Probably doesn’t even matter.

Would you have returned the phone; sold it to Gizmodo for $5K, or Mr. Berlind for $10K, or for free just to do him a solid; or published the “scoop” yourself, because, after all, “markets are conversations?”

Dave, by “All I can say” I meant that David is a friend whom I know to be a good man. He’s also one of the best reporters I know.

A few years ago, David and I were on the same side of a moral argument that had to do with openness, as I recall. Can’t find it, just like I can’t find the item about the wallet in the bus.

I think it was wrong for the guy who found the phone not to return it, and to sell it to Gizmodo. I think it was wrong for Gizmodo to buy it, and to use the opportunity to pull Apple’s pants down. And I think it would be wrong if David did the same thing.

In this piece I wanted to surface the moral compromises that investigative reporting often involves — ones that are rarely visited. So, when I read, “I’m quite conflicted about the morality of the issue vs. the responsibility I have to my employer. Especially after reading that piece,” I think maybe I got somewhere. I was also disappointed that, given a choice between “the morality of the issue” and “responsibility to my employer,” that David would still side with the latter.

I’m also disappointed with, “But there isn’t a successful media pro in the world (including me) that doesn’t wish it was them that got their hands on the iPhone 4G (even at a cash cost). If they tell you otherwise, they’re lying.” One reason is that he does describe a prevailing ethos in journalism. Another is that I believe it’s not wholly true. There are lots of successful media pros who would have returned the item. Especially if they ran their moral choices past their legal departments. As Gizmodo is no doubt doing now.

But I didn’t say that, and maybe I should have. I was in a hurry, as I am now, risking a missed flight to respond here.

There are so many issues of property ownership here it’s hard to cover them all. One of the many things that has been missed is that, unlike a politician or government agency, a business has obligations to its investors. It also has legal obligations that are policed by the SEC in order to protect its investors interests. This is one of the many reasons that intellectual property theft is such a huge issue for a technology company. Expectations, delivery, timelines, etc. are communicated in press releases not just because they are good PR, but because they are legally required. This kind of action, being almost like industrial espionage through the back door, especially publicizing defects which may very well be fixed before release, can have a serious impact on investors and perhaps Apple’s SEC obligations.

About the rest of it, if anyone cares to read another (very lengthy) opinion, I’ve blogged about it here: